Potential legal issues abound in trash-to-ethanol contract

2012-08-29T19:15:00Z 2012-08-30T23:29:14Z Potential legal issues abound in trash-to-ethanol contractMarc Chase marc.chase@nwi.com, (219) 662-5330 nwitimes.com
August 29, 2012 7:15 pm  • 

Some Lake County solid waste officials said they are just as concerned by the legal risks of preserving the controversial trash-to-ethanol contract as the litigation that could result from canceling it.

The Lake County Solid Waste Management District Board is slated to meet in closed executive session with its lawyers at 5:30 p.m. Thursday in the Commissioner's Courtroom at the Lake County Government Complex to discuss the legal ramifications of canceling the nearly 4-year-old contract with Powers Energy of America.

Though no vote will be taken at Thursday's executive session, the meeting is intended to help shape how the full board will vote on the issue at its next public meeting, scheduled for Sept. 20.

Tired of Powers' failure to secure financing, permits and a construction timeline for the project, the board voted in February to find Powers in breach of contract.

However, some board members, including Griffith Councilman Rick Ryfa, said they are just as interested in analysis from the attorneys regarding legal risks for maintaining the Powers contract, including the specter of a potential antitrust lawsuit from the trash-hauling industry.

The matter involves several key legal issues.

Possible lawsuits

Solid waste officials have told The Times the first priority of Thursday's executive session is to hear the grounds for possible Powers Energy lawsuits if the district cancels the contract.

The board officially contends Powers is in breach of contract because he has failed to construct and operate a trash-to-ethanol facility in Schneider.

Further compounding the issue, an attorney from the National Solid Wastes Management Association has previously told The Times his agency, which represents traditional waste haulers and landfill operators, could have legal grounds to sue the district if it maintains the contract with Powers.

Such a lawsuit would rely on legal precedent that forbids government control of garbage flowing to privately owned facilities.

In a 1993 ruling, the U.S. Supreme Court ruled the town of Clarkstown, N.Y., violated laws governing interstate commerce by adopting an ordinance that routed all municipal trash to a private processing facility within town limits, thus depriving out-of-state trash processors access to the local market.

New ownership

Clifford Duggan, attorney for the solid waste district, also has said the possibility of new ownership in the trash-to-ethanol project raises some legal questions.

At its Aug. 16 meeting, Duggan advised board members to schedule the executive session after they learned that a consortium of construction contractors was attempting to buy out Powers Energy.

The consortium — made up of region firms Superior Construction, Morrison Construction and Continental Electric — is reportedly in the process of vetting a Powers proposal to sell his trash-to-ethanol technology license to the consortium.

Looking forward

No final decisions pertaining to the Powers contract will be made Thursday night. The board's Sept. 20 public meeting would be the earliest likely time the board either could vote to kill the contract, or give more time to Powers Energy or to the consortium that may buy out the company.

Some board members, including Schererville Councilman Hal Slager, have suggested canceling the contract and rebidding proposals from companies to consolidate the county's trash processing and collections — which was the original goal of the Powers Energy contract.

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